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Interest seems muted in bids for Tribune

As today's deadline approaches, the Chandler family appears to be leaning against making an offer.

January 17, 2007|James Rainey | Times Staff Writer

The 4-month-old auction of Tribune Co. appeared to be limping toward today's bidding deadline with several potential buyers on the sidelines and the California family that promoted a sale or breakup unsure whether to respond with an offer.

The Chandler family, the previous owner of the Los Angeles Times, is the largest single shareholder of Tribune, the Chicago-based company that owns The Times, KTLA-TV Channel 5, the Chicago Cubs baseball team and various other media properties.

The Chandlers had been pondering an offer for the company to protect the value of their 20% stake. But they are currently leaning against bidding, according to a person familiar with a meeting Tuesday of the Chandler Trust board.

"No conclusion has been reached yet, but the family would like to lean away from" Tribune and the media business, said the person, who had not been authorized to speak and asked not to be identified. The family, however, did not rule out submitting a bid as a backstop should no other offers come through by the deadline.

A special committee of seven Tribune directors is scheduled to discuss options for the company and report to the full Tribune board Saturday. The board includes three Chandler representatives and Tribune Chief Executive Dennis J. FitzSimons; all recused themselves from the committee because they are deemed to have a direct stake in the outcome.

The Chandlers set off the discussion of Tribune's future in June when they protested FitzSimons' plan to buy back $2 billion in company stock to help prop up the sagging share price. One family representative on the board filed a letter with regulators saying the company should consider options, including a sale or breakup, because it had failed at its strategy of building synergy by owning newspapers and television stations in the same cities.

The possibility of a sale or breakup boosted Tribune stock for a time, but the bidding has been tamped down by continuing questions about the ability of newspaper companies to make money as consumers and advertisers shift to the Internet for their news.

Tribune shares closed down 8 cents Tuesday at $30.52. That was only slightly above the trading price when the company was put into play. It's far below the mid-$40 price cited last summer by the Chandlers as the company's true value.

Several media outlets reported Tuesday that the outlook for a Tribune sale appeared to be dimming. CNBC said that a private equity consortium of Madison Dearborn Partners, Apollo Management and Providence Equity Partners had decided not to submit a bid. Bloomberg News reported that Apolllo had dropped out.

Four other private investment firms that expressed initial interest in the company -- Carlyle Group, Bain Capital Management, Texas Pacific Group and Thomas H. Lee Partners -- have shown no signs of going forward with an offer. The nation's largest newspaper company, Gannett Inc., also reportedly dropped out.

That could leave a pair of Los Angeles billionaires, Eli Broad and Ron Burkle, as perhaps the only ones still considering a bid for the entire company. The partners were said to still be considering an offer early in the week. They declined through representatives to comment Tuesday.

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james.rainey@latimes.com

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